Saturday, December 29, 2007

Web site visitors vs. turnover

I got excellent data from one of our customers. It's quite obvious that I can't tell you which company it is, atleast at the moment. They do some of direct sales, but mostly their turnover comes from resellers. The CEO of the company looked at their web site visitors and turnover. As you can see below, there are only couple of exceptional months (May and August), and most of the year visitor and turnover curves follow each other.

If this is true, we want more visitors to website to get more sales, right? And we would like to measure couple of things, so we can prove it by numbers. The company is doing different kind of marketing activities constantly, so here's suggestions what we could measure:
  1. Off-line sales by printable special offer coupons
  2. How much the next marketing campaign costs?
  3. How many new visitors they get from the campaign?
  4. How much they are getting new income from the campaign?
  5. What is the cost per action (CPA) or cost per order (CPO)?
  6. What is the profit margin?
  7. What is the return on ad spend (ROAS)?
  8. What is the return on investment (ROI)?
It's really challenging to get exact sales figures when you're selling off-line and mostly through your resellers. People can convert without printing any coupons and they can convert by phone or email. It's hard to measure how your marketing works, if you're not having separate domains, phone numbers or email addresses for each campaign. But it's better to do the estimation roughly than doing it at all. That is marketing optimization. What do you think, can we prove the formula (web site visitors generate turnover)? And finally, a good quote from the CEO:
It's very important to have a good web analytics system in place, so marketers can find out their return on investment. Without this, importance of the company website may seem to be far less than it actually is.